Portfolio Update May 2022

Today is the last day of May 2022 for me to review my investment portfolios.

The stock markets have remained volatile engulfed under the immense noises engulfing Fed tapering, interest rates hikes, inflation fears, recession fears, Omicron variant fears, rise of US Treasury yields, Ukraine war, poor company quarterly results and so on.

Whether it will stay as a bear market or merely just a correction remains uncertain. There are emerging signs of stabilization and rebound. Nevertheless, time in the market always beats timing the market. Every market tank leads to a rebound, stronger than ever before.

The stock market always and only goes up, at least for the S&P 500 or Dow Jones. SGX and HSI have no guarantee of such trend though.

I remain invested and continue to hunt for income-producing assets and growth businesses in the coming few weeks, for the long-term.

My SGX Income Portfolio value plummets to $271.4k from $283.2k last month mainly due to the rather heavy correction of S-Reits to reflect the impact of interest rate hikes.

My US/HK Growth Portfolio value stagnates at US$17.5k from US$17.4k last month.

My SRS Ultra Long-Term Portfolio value dips to $118.6k from $120.2k mainly due to retracement of OCBC share price.

Portfolio Actions

1. Assigned 100 shares of Palantir Technology Inc. at $20 from a PLTR220819 put option with $20 strike price on Moomoo.

2. Subscribed $9,000 of Astrea 7 PE Class A-1 bonds successfully. My bonds are not reflected and tracked in SGX Income Portfolio. 

Portfolio Dividends

1. Received $114 of dividends from Savings Bonds on 1 May.

2. Received $157.50 of dividends from Wilmar on 6 May in SRS account.

3. Received $72 of dividends from Sembcorp Industries on 10 May.

4. Received $470 of dividends from ST Engineering on 10 May in SRS account.

5. Received $370.20 of dividends from UOB on 13 May.

6. Received $960.12 of dividends from OCBC on 20 May in SRS account.

7. Received $42 of dividends from OUE on 26 May.

8. Received $105 of dividends from Comfortdelgro on 27 May in SRS account.

9. Received $184.08 of dividends from Frasers Centrepoint Trust on 30 May.

10. Received $119.55 of dividends from Suntec Reit on 30 May.

SGX Income Portfolio

Portfolio Value = $271.4k

US/HK Growth Portfolio

Moomoo

Tiger Broker

Syfe Trade

Total Portfolio Value = US$17.5k

SRS Ultra Long-Term Portfolio

Thank you for reading. As always, stay safe and remain strong.

With love & peace, 

Qiongster

5 Reasons Why I Topped Up CPF Retirement Account of Parent

 

I just topped up $8k into my mum's CPF Retirement Account today.

Let me reiterate 5 reasons why I did so instead of giving cash.

1. Tax Relief

For selfish reason, I would like to enjoy tax relief of up to $8k per calendar year for topping up my parent's CPF Retirement Account under the Retirement Sum Top Up (RSTU) scheme.

Assuming my tax bracket is at 7%, a relief of $8k will save me $560 of taxes in cash, which is enough to eat more than 100 plates of $4 cai png (vegetables rice) at the coffeeshop.

The tax relief is also applicable to family members such as parents-in-law, grandparents, grandparents-in-law, siblings and spouse.

2. Compounding growth at 4%

In today's high inflation environment, the value of cash is also stifled by relatively low interest rates offered by banks' savings accounts.

CPF Retirement Account yields at least 4% and up to 6% for senior folks risk-free and guaranteed by the Singapore Government. Monies growing at compounded rate of at least 4% will double in 20 years hence, by leaving cash in CPF RA account, they will grow much faster than inflation rate to preserve and uphold its real value.

3. CPF Life

In order to qualify for CPF Life, one need to have at least $60k in their CPF retirement savings before reaching 65 years old. I am helping my mum to boost her CPF retirement savings to qualify for CPF Life as she does not have active income and CPF contributions.

CPF Life offers payouts perpetually for life but is a debatable subject because its pros and cons varied across individuals' opinions. If one's CPF RA does not have $60k before reaching 65 years old, then he or her will only rely on Retirement Savings scheme to draw down their CPF savings till it is depleted.

Having at least $60k in CPF RA will offer extra choice of being able to qualify for CPF Life scheme to enjoy perpetual monthly payouts.

4. Matched Retirement Savings Scheme

Under the Matched Retirement Savings Scheme (MRSS), the Government will match every dollar of cash top-ups made to the Retirement Account of eligible members up to a cap of $600, which can amount to $3,000 over 5 years. To be eligible, the person has to be aged between 55 and 70, has a CPF RA of less than the current Basic Retirement Sum of $96k, has average monthly income of less than $4k, live in a property with annual value less than $13k and not own any private property.

By topping up at least $600 to a qualified family member's CPF RA account, we can milk the $600 of free money from the Government every year.

5. CPF is like golden ATM for senior citizens

For senior folks close to reaching the 55 year old and 65 year old milestones of being able to touch their CPF monies, their CPF accounts are like golden ATM that offer high interest rates for "withdrawable" cash with the click of a button. This is unlike younger folks who could only stare at their CPF balances as numbers. Hence, the concept of 1M65 is indeed beneficial and practical to people who could really live beyond 50s or 60s and on the brink of drawing down cash from their CPF balances. People who lived past 50 years old should try to pump more monies into their CPF accounts, by all means, in order to reap the risk-free guaranteed returns on their monies.

In conclusion, I top up my parent's CPF RA account with cash instead of giving cash, in order to maximise the value of money. For the $8k topped up, I can enjoy $560 of tax savings myself, let my mum earn at least $280 of CPF interests for 2022 and attract another matched $600 from the Government. In addition, there is compounding effect from future years' interests and being eligible to qualify for CPF Life for perpetual monthly income payouts. Overall, I feel that it is an awesome deal.

Thanks for reading. Stay safe and be strong as always.

With love & peace, 

Qiongster

My Allocation of Astrea 7 Class A-1 PE Bond

Two days ago I applied for $11k worth of Astrea 7 Private Equity Class A-1.

Today my bank account is refunded with $2k together with credit of OUE dividends.

This means $9k of allocation. Not a nice amount but I expected way lesser allocation amount i.e. $6k to $8k.

$9k generating more than 4% yield like CPF SA. Not too shabby for a passive bond investment.

Thanks for reading.

With love & peace, 

Qiongster

Applied Astrea 7 Class A-1 PE Bond

 

The dateline for IPO application for Astrea 7 Private Equity Class A-1 and Class B bonds is 12pm on 25 May 2022. The bonds will commence trading on SGX on 30 May 2022, 9am.

The Class A-1 bonds are in Singapore dollars and yield 4.125% p.a. and its yield will be stepped up by 1 % if not redeemed at the end of 5 years while Class B bonds are denominated in US dollars and come with higher credit risk profile as they rank junior to Class A-1 and A-2 bonds in terms of priority of payment hence higher returns at 6% p.a. Likewise, the Class B bonds will have a step-up from 6% to 7% if they are not redeemed at the end of 6 years.

Astrea 7 PE bonds are backed by cashflows from a $1.9 billion portfolio of investments in 38 PE funds, which have 982 investee companies.

 

As the Class A-1 bonds are rated A+sf, I would not mind stomaching the relatively low risk to reward ratio by putting some of my spare funds into it to earn a yield comparable to my CPF Special Account and higher than the capital protect risk-free Singapore Savings Bonds.

I have applied $11k of Astrea 7 PE Class A-1 bonds via OCBC Internet Banking today.

Wishing myself and all applicants good luck!

With love & peace, 

Qiongster

5 Lessons Learnt From Crypto Crash

 

Crypto currencies have crashed hard for the past week.

Most spectacularly, the value of Terra LUNA was wiped out 99.99% to become almost worthless.

Bitcoin value was shed more than half and Ethereum dropped by more than 30%.

Luckily, my exposure to crypto currencies was only less than $600. It was a new venture or rather an experiment by staking $500 worth of Cronos token for the Ruby Red Crypto.com debit card which gave 2% (Reduced to 1%) and free Spotify reimbursement. I also bought some Nano, Holo, Ripple, Cardono and Matic for fun. I do not intend to buy more nor sell them. Will keep all my crypto in cold storage.

With a conservative mindset, I have been sceptical on crypto currencies for a long time and only dabbled late last year after almost a decade of inception by Bitcoin.

Let me share 5 lessons learnt from this episode of crypto crash.

1. Portfolio Allocation is very Important

We would have suffered tremendous losses if we have allocated a relatively huge proportion of our assets to crypto currencies or worst case, LUNA. 

If we manage our risks by exposing our investments in Bitcoin or other crypto currencies to at most 5% or 10% of our net worth or assets, we should be fine.

2. Cryptocurrencies have no Underlying Backing

Unlike a country's currency which is backed by its reserves or gold. Crypto currencies are purely driven by demand and supply of traders, investors and largely driven by fear and greed.

A company stock is almost the same as crypto but a company's equity can be backed by its fundamentals in terms of revenue, cashflow or profit generating ability of a business.

3. High Risk High Returns

The reason for high Annual Percentage Yield for crypto through staking or huge capital gains is due to its high risks.

Higher returns compensate for the great amount of risks that a crypto investor bear when he or her stakes their crypto on various crypto exchange platforms which again present more uncertainties and risks. Regulatory, systematic, unsystematic, forex, technology, political, corporate risks just to name some.

The same thing happens to bonds and funds whereby junk bonds and funds of developing economies present much greater yields than stable triple A rated bonds or funds comprising top quality blue chips businesses from US.

High risks translate into high returns, which at the same time means greater volatility and could present high potential losses.

4. Invest money that we could afford to lose

Similar to investment in stocks or buying lottery, we should only invest or punt using our spare cash or war chest that we do not need for our daily expenses.

We should always avoid using margin or leverage or borrow money to dabble in high risk financial instruments like stocks, bonds, options, derivatives and crypto currencies.

5. No Fear No Greed

Since more than 2 million years ago, humans were always irrational with emotions and usually made decisions largely driven by fear or greed.

Wars, fighting, looting, crimes, were all driven by greed. The inventions of weapons, cannons, guns, defences, castles, barricades were all due to fear and lack of sense of security.

Greed results in fear of missing out or FOMO thereby chasing higher and higher prices leasing to people buying crypto currencies at inflated prices.

Fear results in people running for exits and cutting losses to get back their money when shit hits the fan.

Cryptocurrencies were invented for humans with great intentions to resolve limitations of traditional currencies and for anyone on earth to own a stake of the Internet, make secured digital payments, store digital money safely, beat inflation in this digital world.

However, just like any financial asset, Cryptocurrencies become a great digital asset for speculative trading and punting other than long-term investment. 

Every crisis is an opportunity and perhaps a great wake up call to budding and seasoned investors and traders of crypto.

Thanks for reading. Stay safe and remain strong always!

With love & peace,

Qiongster

Net Worth Update May 2022 | Growth Stagnated

 

S$1.26m

It is middle of the May month for another typical net worth update.

Having collected my May 2022 salary, Apr 2022 CPF contributions and some dividends from my SGX income portfolio for this quarter, I paid off all my credit card liabilities and bills.

Being debt free allows me to own a peace of mind to sleep soundly.

The stock markets have crashed due to the immense noises of recession fears, interest rate hikes, commodities prices spike, inflation, pandemic, war etc. and wiped out more than $10k of my net worth.

As a result, my net worth stagnates at $1.26m.

I have completed SRS contribution of $15.3k, RSTU of CPF SA account of $8k and plan to start top up my mum's CPF RA account.

I have transferred a matured fixed deposit with UOB to OCBC at 1.28% p.a. and tempted to subscribe the Jun 2022 tranche of the Singapore Savings Bond which offers around 2.5% p.a. yield for the next 10 years.

I have another fixed deposit with UOB maturing this month and an Great Eastern endowment maturing next month and I may use those proceeds to subscribe for Singapore Savings Bond.

In the US stock market, I continue to increase my investments in growth businesses such as Alphabet Inc., and Palantir, while also monitoring other tech companies such as Microsoft, Amazon Inc. and banks such as Citigroup and Bank of America. 

On the local SGX front, I remain on the lookout for the out-of-favour high quality Frasers and Mapletree Reits and ready to pounce on them to increase my investments for more dividends in future.

As my priorities are on the US and SG stock markets, I do not have plan to catch the falling knives presented by the likes of Chinese ATM (Alibaba, Tencent and Meituan) yet.

I have also witnessed the crash of crypto currencies and experienced a paper loss of a meagre $300 from my exposure to Cronos tokens from staking in Crypto.com. I have written off around $500 of my investment in Crypto and excluded them from my net worth computation.

The coming months in this year 2022 remains challenging and predictable. Immense inflation has caused prices of food and necessities to surge. The stock markets stay volatile and could test lower supports into bear territories or could rebound strongly. In this endemic tropical island, we get to live our lives normally and gradually see normalcy returns. Borders with other countries have reopened and the passport waiting time is around 6 weeks. It is now time to regain back the lost freedom for the past 2 years.

Ignore the noises. Stay focused. Remain on track. Be greedy when others are fearful. We will get to our goals and dreams eventually.

Thanks for reading. Stay safe and remain strong always!

With love & peace,

Qiongster